(Penang, Saturday) :For the past two weeks,
Malaysians had been fed with the news that good economic times are back,
with the country drawing a record RM20.2 billion in foreign investment in
manufacturing, a record 2006 trade volume breaching RM1 trillion,
rocketing share prices, a strong ringgit and rising foreign reserves.

The Prime Minister Datuk Seri
Abdullah Ahmad Badawi had denied that an imminent general election is on the
cards because of the slew of good economic news to generate a “feed good
euphoria” reminiscent of the period before the 2004 general election.

Although the next general
election will not be held in the next few months, everyone would expect the
holding of early general elections in the next eight to 14 months before
April 2008, when Datuk Seri Anwar Ibrahim would regain his civil liberties
including the right to stand for elections at the end of his five-year
disqualification from the date of his prison release.

But are the good economic
times back for the people of Malaysia? If so, a little-noticed announcement
on Chinese New Year’s Day, has sent out a very different message.

On February 18, 2007, Bernama
reported that the government had scrapped its earlier plan to extend the
textbook loan scheme to all school students, both at primary and secondary
level, from next year. Deputy Education Minister, Datuk Noh Omar was quoted
as saying that the move was scrapped as the ministry would incur an extra
sum of over RM100 million yearly.

When the government has to
cancel the textbook loan scheme for all students because it cannot afford
the additional expenditure of RM100 million, it strains credibility to
believe that the government and the country is aflush with funds.

Malaysians have been told in
the past fortnight that the country is back on the global investment map, in
reversal of the gloomy news in the past few months that Malaysia is in
danger of dropping out from the radar of foreign investors because of
increasing lack of international competitiveness, whether in efficiency of
public service, quality of education, good governance, transparency and
integrity.

The United Nations Conference
Trade and Development (Unctad) World Investment Report 2006 last October
revealed unflattering figures about Malaysia for the year 2005, viz:

For the first time since
1990, Indonesia managed to overtake Malaysia in drawing FDIs. Inflows to
Indonesia surged by 177% to US$5.26 billion in 2005. Indonesia registered
a 177 per cent hike in FDI from US$1.89 billion in 2004 to US$5.26
billion in 2005, while Malaysia suffered a 14.3 per cent shrinkage of FDI.

As a whole, FDIs to South,
East and South-East Asia reached a new high of US$165 billion in 2005, a
19% increase over 2004, with China (US$72 billion), Hong Kong (US$36
billion) and Singapore (US$20 billion) as the biggest receipients of FDIs
in 2005.

Ten days ago, the Minister for
International Trade and Industry, Datuk Seri Rafidah Aziz gave a glowing
picture of foreign investments for last year, with one mainstream newspaper
declaring: “Malaysia is back on the global investment map”.

She announced a record RM46
billion achieved last year – RM20.2 billion of approved foreign investments
in manufacturing as compared with RM17.9 billion in 2005 and RM25.8 billion
in domestic investments compared with RM13.1 billion in 2005.

Rafidah’s FDI figures however
do not tally with the latest Unctad figures released in its “Number 1, 2007
Unctad Investment Brief” which has given an even lower estimate for FDI for
Malaysia for 2006 as compared to 2005.

In its preliminary estimates
of FDI inflows in 2006, Unctad figures for Malaysia sees a shrinkage of 1.6
per cent to US$3.9 billion from US$4.0 the previous year, while FDIs for
the whole region of “South, East and South-east Asia” registers an increase
of 13.1 per cent from US$165.1 billion in 2005 to US$186.7 billion, with
Thailand recording a 114.7 per cent increase from US$3.7 billion in 2005 to
US$7.9 billion and Singapore a 58% increase from US$20.1 billion in 2005 to
US$31.9 billion.

The Prime Minister should
explain the RM6.4 billion difference in MITI’s FDI figure of RM20.2 billion
(or US$5.7 billion) for 2006 and UNCTAD’s preliminary estimates of US$3.9
billion (RM13.8 billion) for the same year.

This difference would increase
to RM9.85 billion if we take into consideration two qualifications to the
MITI figures released by Rafidah:

Firstly, the figures are for
approved FDI figures for the year which are very different from actual FDI
inflows for the year. For instance, for 2005, approved FDIs in manufacturing
was RM17.9 billion (US$4.71), but actual FDI inflow into the country was
US$3.97 (RM15.1 billion) – a shortfall of RM2.8 billion.

Secondly, the FDIs in
manufacturing represents only 75% of total FDIs, which will bring the
difference between FDIs for manufacturing as approved and actual inflows for
2005 to RM6.6 billion.

On the same basis that some 75
per cent of FDI inflows in 2006 was for manufacturing, then the difference
between MITI and Unctad figures for FDI inflows for manufacturing would
increase further to RM 9.85 billion – which is no small figure.

A full and proper explanation
for these different set of FDI figures should be given to the people in
keeping with the government’s pledge of accountability, transparency and
good governance.